This exceptional story was back in 6/2012, I know a lot of people who do this today without any issues & Costco corporate policy expressly allows this

Here's their policy about gift cards:

"You must be a Costco member to purchase or reload Costco Cash Cards. Members and non-members may use the cash cards to shop at any Costco location in the United States, Canada, Puerto Rico and online at Costco.com or on Costco.ca. Costco Cash balances may be used toward membership or merchandise."